Department of Health Caps Fixed Costs at £25K For Clin Neg Cases Sparks Mixed Response
After lengthy consultation, Health Minister Jeremy Hunt has revealed plans to cap fixed costs for clin neg cases to £25,000 as a tool to curb what he describes as “unscrupulous firms” syphoning off “excessive legal costs that dwarf the actual damages recovered.” It is hoped this will save NHS England £45m a year by 2020/2021.
This decision will go beyond clinical negligence litigation, also addressing the use of experts and Civil Procedure Rules. As expected the consultation will also include numerous exceptions from fixed costs such as child fatalities arising from clinical negligence.
The government appears confident in its decision due to its consideration of not only Access to Justice concerns as laid out by health minister Lord O’Shaughnessy but by also considering the lobbying of the Law Society, Association of Personal Injury Lawyers, Society of Clinical Injury Lawyers and Action against Medical Accidents.
However, the DoH’s decision has been largely shaped by an evaluation it commissioned from reputed academic Professor Paul Fenn who crunched the data of fixed costs in the civil justice system during the past 15 years, concluding that the argument to fix costs above £25,000 were “unpersuasive.”
Fenn identified that the majority (60%) of claims settled by the NHS were between £1,000 and £25,000 and this is where most of the disproportionality between claimant costs and damages was evident, calculating an average of claimant recoverable costs 220% of the damages awarded.
Claimant lawyers have often accused the NHS Litigation Authority of escalating costs by appearing to drag out the process and taking too long to settle and this concern is reflected in the consultation paper saying neither disproportionality nor time taken to settle “are in the best interests of the patient or the taxpayers.”
Action against Medical Accidents (AvMA) is “deeply disappointed” that the government appears to have rushed towards its proposals without considering Lord Justice Jackson’s review about fixed costs or what the National Audit Office has to say about how the NHSLA runs its cases.
The Medical Defence Union believes Hunt’s assessment is off target and was in fact hoping for him to deliver on suggestions in line with DoH’s pre-consultation on fixing costs for claims up to £250,000 which the Union believes would have a more immediate impact on disproportionate legal fees.